**The David Rubenstein Show: Mellody Hobson — Transcript & Summary | SozAI** Source: https://sozai.app/transcript/david-rubenstein-show-mellody-hobson/ David Rubenstein interviews Mellody Hobson, discussing her career, leadership, diversity in corporate boards, and her role as Starbucks chairman. ## Key Takeaways - Diversity in boardrooms is essential for understanding customer preferences and corporate success. - Mellody Hobson is a trailblazer as the only Black female chairman of a major Fortune 500 company. - Persistent efforts are needed to improve minority representation in corporate leadership. - Strong mentorship and loyalty have been key factors in Hobson's career growth. - Companies ignoring diversity risk committing corporate suicide. ## What the video covers - David Rubenstein interviews Mellody Hobson, co-CEO of Ariel Investments and chairman of Starbucks. - Hobson discusses her unique position as the only Black female chairman of a Fortune 500 company. - She emphasizes the importance of diversity in corporate boardrooms for business success. - Hobson shares her background growing up in Chicago and her educational journey through Princeton. - She reflects on the challenges faced by minority-owned businesses and women in leadership. - The conversation covers Ariel Investments' focus on small and mid-cap U.S. stocks and global expansion. - Hobson talks about her advocacy for increasing African-American representation on corporate boards. - She highlights the role of mentorship and loyalty in her career development. - The interview touches on her philanthropic efforts and personal values. - Hobson stresses that companies lacking diversity risk corporate failure. ## Chapters 1. 00:00 Introduction and Interview Setup 2. 01:35 Mellody Hobson’s Unique Role in Corporate America 3. 02:59 Challenges and Progress in Boardroom Diversity 4. 04:26 Background and Early Life of Mellody Hobson 5. 06:01 Ariel Investments and Business Philosophy 6. 07:16 Education and Mentorship Influence 7. 09:02 Advocacy for Diversity and Corporate Responsibility 8. 10:56 Philanthropy, Personal Values, and Career Reflections Answers ## Questions about this video Who is Mellody Hobson and what are her major roles? Mellody Hobson is the co-CEO of Ariel Investments, chairman of Starbucks, and a board member of JP Morgan. She is recognized as the only Black female chairman of a Fortune 500 company. What is Mellody Hobson's stance on diversity in corporate boards? Hobson believes that diverse boardrooms are essential for understanding customer preferences and ensuring the long-term success and stewardship of companies. How did Mellody Hobson's background influence her career? Growing up in Chicago with a hardworking mother in real estate, Hobson was motivated to pursue excellence, attend Princeton, and focus on minority representation and leadership in business. ## Full Transcript — Download SRT & Markdown 00:09 Speaker A This is my kitchen table and also my filing system. Over much of the past three decades, I've been an investor of the highest quality of mankind. I've often thought this private equity. And then I started interviewing on my watch here. 00:25 Speaker A interviewing those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said fine I didn't negotiate with him. I did no due diligence. I have 00:36 Speaker A Interviewing those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said fine. I didn't negotiate with him. I did no due diligence. I have 00:43 Speaker A Was that right. One of the most impressive people I've ever met in the business world is Mellody Hobson. She's the co CEO of Ariel Investments a leading minority owned investment firm in Chicago. She's also chairman of the board of Starbucks and a member of the board of directors of JP Morgan. I had a chance to sit down with her 01:00 Speaker A something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest man. 01:07 Speaker A Right now you are the chairman of Starbucks. You are. I think the only black female who is the chairman of a major Fortune 500 company is that right. Correct. Is that surprise to you in this day and age that not one other black female is the chair of a 01:24 Speaker A Was that right? One of the most impressive people I've ever met in the business world is Mellody Hobson. She's the co-CEO of Ariel Investments, a leading minority-owned investment firm in Chicago. She's also chairman of the board of Starbucks and a member of the board of directors of JP Morgan. I had a chance to sit down with her 01:35 Speaker A There may be people out there who are headed for the chairmanship. But right now just the idea that out of 500 companies in the Fortune 500 I'm the only one today. The second only in history. Ursula Burns was the executive chair of Xerox. 01:48 Speaker A recently to talk about an incredible business career and now an incredible philanthropic career as well. 01:55 Speaker A You have been very active in trying to get more African-Americans on corporate boards. And in fact you have a conference that you host you've attended. And you interviewed me. I guess they grilled me about my own situation. Isn't that tough. Well I wish I got through it. But your husband said I did better than most. In any event. So why 02:16 Speaker A Right now you are the chairman of Starbucks. You are, I think, the only black female who is the chairman of a major Fortune 500 company. Is that right? Correct. Is that a surprise to you in this day and age that not one other black female is the chair of a 02:26 Speaker A minority owned investment company in the nation back in 1983 will be thirty nine years old in a month. 02:35 Speaker A major company and public company? Yes, absolutely. I think it's quite disappointing. And do you see any progress in this area in terms of being chair? I, I don't know. 02:47 Speaker A perspectives around the table and you certainly need to understand all of the potential preferences of the customers that you have the buyers that you have. What have you. And so at the end of the day we think a diverse boardroom is essential to 02:59 Speaker A There may be people out there who are headed for the chairmanship. But right now, just the idea that out of 500 companies in the Fortune 500, I'm the only one today. The second only in history. Ursula Burns was the executive chair of Xerox. 03:12 Speaker A mid-cap US names for there to be diversity in those boardrooms. It may not be there when we first make our purchase but you better believe we're going to be pushing and saying you know what is your plan for having a diverse boardroom. And at the end 03:26 Speaker A That is just a poor statement about our society and where we need to be when it comes to race in this country and gender. 03:41 Speaker A to be Cosimo. But well we were we get it. Let's talk about your background. You are from where. Chicago. 03:47 Speaker A You have been very active in trying to get more African-Americans on corporate boards. And in fact, you have a conference that you host. You've attended. And you interviewed me. I guess they grilled me about my own situation. Isn't that tough? Well, I wish I got through it. But your husband said I did better than most. In any event. So why 03:56 Speaker A I was really late in my family. So my siblings are 20 plus years older than me. They always joke that I was found on the doorstep and my mom worked extraordinarily hard. She was in the real estate business and it was I don't even call it feast or famine 04:10 Speaker A are you so interested in this area? And what progress do you think you've made in getting African-Americans on corporate boards? This has always been a big deal to us at Ariel. I think it has a lot to do with our founding as the first 04:26 Speaker A business wasn't so wonderful sometimes. And also she was a black woman trying to do something on her own. It was very very hard during those times. There was a lot of there were just a lot of obstacles for someone like her. 04:39 Speaker A minority-owned investment company in the nation back in 1983. We'll be thirty-nine years old in a month. 04:52 Speaker A school. You did pretty well in high school I guess. School. I was very good at school. Yes. So you applied to college and you applied to Harvard and Princeton and you got in right. Yes. And Harvard is a great place. I'm on the board at the Harvard 05:05 Speaker A And I think it also has a lot to do with the fact that we recognize the boardroom is where all the power is. And at the end of the day, in order for a company to be world class, and that's what we aspire to invest in, we think you need all 05:11 Speaker A My mom really wanted me to go there. I told the story all the time that she taught me Harvard was like Coca-Cola that anywhere in the world that I would go including an African village if I said Harvard people would know what I was talking about. And 05:23 Speaker A perspectives around the table, and you certainly need to understand all of the potential preferences of the customers that you have, the buyers that you have. What have you. And so at the end of the day, we think a diverse boardroom is essential to 05:39 Speaker A school for me. And he ultimately invited me to a lunch with Bill Bradley. And between the two of them and John Rogers the founder of Ariel I was triple teamed. And ultimately I said any school where people would be this fanatical about the school and having someone go there must be a really great place. And so against my mother's 06:01 Speaker A the well-being of a company and its stewardship. And I say this all the time: companies that don't really understand this are committing corporate suicide. And so we advocate in a very strong way in terms of the companies that we own, the small and 06:14 Speaker A then you decide to go back to Chicago. I assume you could have had a lot of jobs in New York or the East Coast but you went back to your hometown and joined a then relatively small firm area. Was that right. It was tiny and at one point six billion 06:26 Speaker A mid-cap US names, for there to be diversity in those boardrooms. It may not be there when we first make our purchase, but you better believe we're going to be pushing and saying, you know, what is your plan for having a diverse boardroom? And at the end 06:41 Speaker A I said I want to come to Ariel because I could see what I could learn from working with him up close versus the layers down that I would be in some of the other firms. I think he was surprised by the call. He told me at an open invitation to join the firm 06:54 Speaker A of the day, in the last 39 years almost, we can point to, I think, some 50 companies where we've had diversity added to the board. So let's talk about a company Ariel that you started out as a person right out of Princeton and then you earn 07:08 Speaker A at Princeton has a same telephone number that you had when you graduate. Is that right. That's right. Out of eleven hundred people. So you can tell that loyalty means a lot to me as well as consistency and stability which is the opposite of what my 07:22 Speaker A to be Cosimo. But well, we were, we get it. Let's talk about your background. You are from where? Chicago. 07:36 Speaker A right. We cut our teeth in the small and mid-cap space U.S. stocks. And in 2011 we Brad Stone sent to international and global with a New York team in a New York office. So we do small and mid-cap investing and U.S. stocks and then we do I'll keep 07:50 Speaker A And you grew up in a very wealthy family. No, just the opposite. I grew up as the youngest of six kids. My mom was a single mom. 08:01 Speaker A do it differently. So your firm specializes in what's called value stocks which means cheap stocks. You're not into the high technology High Flyers but the High Flyers have done so well. Crushed it in recent years. So what made you think maybe you 08:14 Speaker A I was really late in my family. So my siblings are 20 plus years older than me. They always joke that I was found on the doorstep. And my mom worked extraordinarily hard. She was in the real estate business, and it was, I don't even call it feast or famine, 08:27 Speaker A successful. And that's where you want to be. So when we look at this past decade where large caps and growth have dominated in a way that we've never seen before selling at valuations that we've never seen before relative to value or cheaper stocks we 08:45 Speaker A or food not feast. And she really struggled a lot. We used to get evicted. I told these stories all the time because they were foundational to who I am. We should get our car repossessed and not other trouble. Her mother was supporting the family, and the 08:50 Speaker A Math has no opinion. When you look at the map the the the differences in returns over long periods of time between growth and value and that divergence that we've had recently you can't help but to see a tremendous amount of opportunity and value especially in it with the backdrop of rising interest rates. 09:10 Speaker A business wasn't so wonderful sometimes. And also she was a black woman trying to do something on her own. It was very, very hard during those times. There was a lot of, there were just a lot of obstacles for someone like her. 09:20 Speaker A outperformed by not owning an index. So he's proof positive that it's possible that you can outperform the broad market. But more importantly in our world we believe in the efficient market theory and the inefficiency is in areas that are the that are 09:35 Speaker A She didn't have my education, but she was very, very wise. And she imparted, I hope, that wisdom in me that allowed me to be the person that I am, as did my siblings. You were able to overcome all this by doing well in 09:44 Speaker A You also see that inefficiency in international markets. That's where we work and live at Ariel. And so we think we can exploit those inefficiencies in those areas which is where we would say we would respectfully disagree with Warren. 10:22 Speaker A school. You did pretty well in high school, I guess. School. I was very good at school. Yes. So you applied to college, and you applied to Harvard and Princeton, and you got in, right? Yes. And Harvard is a great place. I'm on the board at the Harvard 10:36 Speaker A line like everybody else. I wait in line like everyone else. That's a that's an important part of the process to see how everything's working how long it takes what the what's happening in the store. But now that you're the chair when you walk in any 10:48 Speaker A Corporation. So why did you choose to go to Princeton, which is a great school, over Harvard? Harvard is a great place. I loved it. 10:59 Speaker A take pictures of the cases. I do all sorts of things when I go in. So what's your favorite drink can you say. Is that a state secret. I make a joke about this so I like my coffee black like me. OK. Now Howard Schultz has been a mentor to you a bit. Is 11:13 Speaker A My mom really wanted me to go there. I told the story all the time that she taught me Harvard was like Coca-Cola, that anywhere in the world that I would go, including an African village, if I said Harvard, people would know what I was talking about. And 11:23 Speaker A What did he actually do that made it the biggest in the world. He really started off from the very beginning saying that he wanted to create a different kind of company and that he had this point of view about leading through the lens of humanity. 11:34 Speaker A Princeton was like Sprite. She said we only knew it in America. And at the end of the day, after visiting, though, a Princeton alum named Richard Nestor called me every single day after I got into Princeton and told me why Princeton was the better 11:47 Speaker A And so at the end of the day I think he put people first not only in terms of the partners of the company but also in terms of the customer. And at the end of the day that is what has made the company so great. OK. So today you're coming to New York for 12:00 Speaker A school for me. And he ultimately invited me to a lunch with Bill Bradley. And between the two of them and John Rogers, the founder of Ariel, I was triple teamed. And ultimately, I said any school where people would be this fanatical about the school and having someone go there must be a really great place. And so against my mother's 12:07 Speaker A Well I'm just saying I'm buying the largest gap. And it's led by Jamie Diamond who's been the CEO for quite some time. So as a board member there what is your responsibility. Is it to help the bank grow. 12:21 Speaker A wishes, I chose Princeton. And you never regretted it, right? Oh, I loved Princeton in every way. You know, Brad Stone, we were hardcore. As we say, we bleed orange and black. OK, so you graduated from Princeton what year? Nineteen ninety-one. And 12:33 Speaker A chairs and that were empty. One chair was a partner at Starbucks. Another chair was a shareholder. And he said when you're in that boardroom be proud of everything you say to those two chairs. And I've taken that to heart. And I did the exact 12:45 Speaker A then you decide to go back to Chicago. I assume you could have had a lot of jobs in New York or the East Coast, but you went back to your hometown and joined a then relatively small firm, Ariel. Was that right? It was tiny and at one point six billion 12:57 Speaker A And in terms of what Jamie has taught me Howard and Jamie have taught me different things. Obviously I've been with Howard for a very long time and I think he molded me as a person in terms of my my professional self from watching him especially for so 13:12 Speaker A dollars in assets, maybe 1 billion at the time. And I didn't interview on Wall Street one day after making lots of trips to New York on the train to do the interviews. One day I just called John Rogers. That then he had the title of president. And 13:27 Speaker A you're only as good as your people. I think that is what I see. And I've learned from Jamie another initiative you've been involved with which is to get J.P. Morgan and other companies to invest in minority owned businesses. 13:42 Speaker A I said I want to come to Ariel because I could see what I could learn from working with him up close versus the layers down that I would be in some of the other firms. I think he was surprised by the call. He told me at an open invitation to join the firm 14:02 Speaker A actually this became clear to me. John Rogers used to talk about that all the time saying customers melody customers grow minority businesses. And then I sat in the boardroom at J.P. Morgan and I realized very quickly and clearly if you've got a 14:16 Speaker A after I was an intern, and I eagerly went there. I knew from the first day, and I know it's going to sound crazy, that I would work there my whole life. I knew it. You have worked at Ariel your whole life. In fact, I think you're the only person. Your class 14:33 Speaker A companies are looking to diversify their vendor list both literally and figuratively especially after Covid. 14:39 Speaker A at Princeton has the same telephone number that you had when you graduated. Is that right? That's right. Out of eleven hundred people. So you can tell that loyalty means a lot to me as well as consistency and stability, which is the opposite of what my 14:51 Speaker A haven't had our final close yet. And there are a lot of rules around this. But we are we are very very optimistic. Many people who are minorities feel African-Americans Latinos others who are not a majority status not white feel that this system is built 15:06 Speaker A childhood experience was. So Ariel, for those who don't know, is, I guess, the oldest minority-owned investment firm of its type, and it's a value-oriented firm. Is that right? You buy stocks that are, let's say, value-oriented, cheap. In other words. That's 15:16 Speaker A they can rise up. Your hometown of Chicago is have lots of problems of course. What. You say to these people about whether this country really still exists for the American dream is it possible for people to do what you've done so first and 15:28 Speaker A right. We cut our teeth in the small and mid-cap space, U.S. stocks. And in 2011, we, Brad Stone, sent to international and global with a New York team. 15:41 Speaker A just hard work and effort. And along the way I got lots and lots of breaks and miracles did happen. But the American dream to me is alive and well. Now that said I'm a capitalist with a capital C. But I think capitalist should be working for more people. 15:56 Speaker A Right now the system is limited. It is not as good as it could be. It's gotten better over time but it can be better still. And it will be better still when more people of color can participate in the system. When everyone can play the game gets 16:10 Speaker A better. We have learned that time and time again. Reverend Jesse Jackson says that about baseball. It wasn't as good as it could be until Jackie Robinson can play when everyone can play when you can have the best competitors competing you'll ultimately 16:24 Speaker A end up with a better outcome. Globally domestically inside of a company. And so to me the American dream is possible but it is failing. A lot of people because of some of these racial blinders that exist. Why do you need to be the Cassio of area. 16:42 Speaker A Why don't you just do nonprofit boards corporate boards and other things. Anyone who knows me knows that that question doesn't make sense for me. My heart my love is Ariel. Ariel's my first child. 16:57 Speaker A Now some people would say Melody you are a lot of corporate boards you're a lot of non-profits will talk about. You've also married a very very wealthy famous person named George Lucas the creator of Star Wars among other things. So why do you need to be the co CEO of Aereo. Why don't you just do nonprofit boards corporate 17:16 Speaker A boards and other things. Why do you still want to do this. Anyone who knows me knows that that question doesn't make sense for me because my heart my love is aerial aerials. My first child it was the thing that I did that I thought about every 17:29 Speaker A morning when I woke up and every night when I went to bed and all day long. And it really became a labor of love for me. Jon joked that he started it and there became a point that he thought maybe I loved it more. I don't think that's true. We 17:42 Speaker A don't can compete for the love of aerial. But I do think it became a part of my DNA. And so leaving it is not something I would ever consider. I've always wanted to be there. So let's talk about some of the nonprofit things you're doing. One of 17:53 Speaker A them I would just want to talk about the one that you're doing. Talk about first you're doing with your husband. You're building a museum in Los Angeles for narrative arts. I guess it would be dealing with his art that he's purchased and all the things he's 18:07 Speaker A done. Can you explain why you're building a museum and what it's going to open and what it's going to be that's so unique about it. Well it's the first museum that's ever been built that is dedicated to the art of storytelling the narrative. So the way 18:19 Speaker A to think about it is a story that is told in one frame. Many directors can see this very clearly. When you look at for example a Norman Rockwell picture a painting you can understand the story just in one frame one shot. And that's what the whole 18:35 Speaker A museum is about. We've dedicated this work to building this building. It will be the first of its kind. It's in Los Angeles. 18:42 Speaker A It is it is seeded with the collection that George started collecting for a very long time. It also has a component of it that is dedicated to Star Wars. But the bigger issue is to create an environment a place where anyone can walk in from any 18:57 Speaker A walk of life from a scholar to a six year old and feel not only like they belong there but also that they understand what's on the walls. Now you are in effect self funding that's putting on most of the money for this. It's all 19:11 Speaker A about style. All right. So that's more than a billion dollars let's say. Isn't that or I don't know of anybody that's ever put up that much money for a museum. You ever think about the cost or you're just not worried about that so much. What we have said 19:24 Speaker A and we really do believe this is that we are holding society's money. So this money is not for us. We have great lives. So please don't in any way think that we're you know struggling here. But it really was that the wealth that was created from 19:40 Speaker A Star Wars and Indiana Jones and all these things was really quite significant. And we think of the lungs back in society. So what's it like to be Mellody Hobson. Everybody knows you pretty much. And you're you can see any body in the world. You want to 19:56 Speaker A see you at the best most famous friends the United States. So do you ever just say I want to just chill out relax get away from all this. And how do you relax. Well first of all I just want to put in context that I get to spend time with people who I really 20:09 Speaker A admire and respect to our world class people their fame. Many of them are not famous at all that you know but they are equally important to me. So that is not how I think about any person that I have a relationship with. What I would say is that 20:25 Speaker A my life has exceeded my own expectations. And I think that's why it's very important not to put expectations around what is possible for you or anyone. And in so doing that I have a great sense of gratitude about all that I've been able to experience 20:39 Speaker A and all the people I've been able to interact with and most importantly learn from. In terms of what I do when I am relaxing we are really basic in my house. So we do things like binge watch television and we usually go to the movies although we 20:54 Speaker A don't do that so much during Covid. George likes to watch in a movie theater with other people and he likes to experience the crowd experiencing a film not to watch on his own. And your husband say Well this isn't a good movie. Let me say what they 21:06 Speaker A did wrong or he doesn't do that. Well actually I love watching a movie with George because he really breaks it down for you. It's not about it being good. I mean it's much more than that. He will tell you what the story is is solid and the foundation of 21:19 Speaker A it is good. He'll tell you what's missing. He'll give you ideas of how the movie could be better. And I mean I've watched a lot of films with George where he's broken them down for me in ways that are just so enlightening. Now have you ever thought of 21:33 Speaker A running for office. You're obviously I'm an outgoing personality very successful. You only get elected in your home state of Illinois or running for president or anything like that or serving in the cabinet. No. And the reason is too busy with 21:46 Speaker A other stuff for government is a little complicated for what you want to do. I'm doing what I meant to do and what I love. I'm not one of those. Grass is greener. The other side of the fence people buy you could see that by virtue of the fact that I 21:59 Speaker A stated Ariel for so long that I have relationships that extend for decades. I just don't I don't think about how do I trade up. 22:07 Speaker A That's just not how I think about life. And if I had that calling I would do it. But that I don't feel that in my heart or soul I feel I'm better off. Contributing to organizations like Ariel and Starbucks Ann and 22:24 Speaker A JP Morgan. So if somebody says I want to bundle the optimism and enthusiasm for life that Mellody Hobson has what is the secret. 22:33 Speaker A How do you get to be so optimistic and and energetic. And what do you think is the key to that. For people want that gratitude. 22:40 Speaker A So when you have had the life that I have every day is a gift. Every day seems like a blessing. Every day feels. 22:50 Speaker A Beyond anything I would have ever expected. And so if that is the way that you have you know if you look at the world I think it ends up being a much better life. You can put it that doesn't mean days aren't hard. I told people at Ariel my worst day is 23:04 Speaker A still awesome. I mean I've had some really bad days but in the context of what I know that can be really bad like worrying about where you're going to sleep or where you're going to eat. Nothing is that bad. Nothing. And it also gives me a great 23:18 Speaker A amount of empathy for people who have those struggles. And so because I never forget I'm always very grateful and because I'm grateful. I think that I'm supposed to work hard. I'm supposed to do better. I'm supposed to be optimistic because the contrary 23:37 Speaker A is. Just doesn't seem right given all the opportunities that I've had. What do I have to complain about. It doesn't mean I don't have moments of complain but in the big context of my life I have perspective. And that perspective allows me to be. Have gratitude and therefore to have joy. Topics: Mellody Hobson David Rubenstein Show Ariel Investments Starbucks Fortune 500 corporate diversity boardroom diversity African-American leadership minority-owned business investment management --- This is the markdown twin of https://sozai.app/transcript/david-rubenstein-show-mellody-hobson/ — the same content, without the markup. Published by SozAI (https://sozai.app). Reuse and quotation are allowed with attribution and a link back. Machine-readable index: https://sozai.app/llms.txt · data API: https://sozai.app/api/